First time buyer & landlord - Questions!

Wallnut

Hello,

I'm new to these forums and hoping to gain some advice from people with similar experiences.

The situation is that i am looking to buy a modest property, nothing fancy maybe a 2 bedroom flat/house which would be solely in my name.

After buying said property i will be having a friend move in with me as a tenant, paying a fair rent per month.

Although i have a multitude of questions on the buying and letting side of it, the most prominent being is there any way a mortgage lender would consider potential income generated from having a tenant? To be honest i doubt this would happen, but it's worth asking anyway.

Secondly, when applying for a mortgage, the income from my full time job is twofold, my fixed basic income is relatively low however my ad hoc work has the potential to double my gross per year on a regular basis, although this is not guarunteed. Would i be likely to be able to secure a higher mortgage amount based on my projected income as opposed to my basic rate?

Thirdly, regarding the income generated from having a tenant, where and what type of income do i have to declare this as?


My next point may be a little controvercial(sp?) but it's worth a thought.
I want to point out at this point that the following is completely hypothetical!

If i were for example to let my friend stay in my spare room totally free of charge and he, recognising my kindness, decided to gift me certain amounts of money from time to time, firstly am i correct in thinking that these gifts would not be subject to the taxable income criteria, and secondly would there be any special benefits or dispensations i would be able to claim being the sole bill payer?

Thanks for reading this far!

S.

Planner

An important distinction for future reference;

Tenant - A person living in a residence where they do not share with the landlord or share any facilities with the landlord. They are normally offered the protection laid down by the various housing acts and therefore have substantial rights.

Lodger - A person that you rent a room and share facilities within a house that you, as landlord, live in. They are offered ni protection under the various housing acts and have little rights.

Your friend will therefore be a lodger. I am not sure about the mortgage question but in terms of the income for tax purposes the HMRC run the rent a room scheme which I understand offers various tax breaks http://www.hmrc.gov.uk/manuals/PIMMANUAL/pim4001.htm

silvercar

If i were for example to let my friend stay in my spare room totally free of charge and he, recognising my kindness, decided to gift me certain amounts of money from time to time, firstly am i correct in thinking that these gifts would not be subject to the taxable income criteria, and secondly would there be any special benefits or dispensations i would be able to claim being the sole bill payer?

Government rent a room scheme allow you to earn £4500 a year tax free.

You cannot claim single person council tax discount if there is a second person living in the property. If you were thinking of doing this any nosy neighbour could report you.